Global markets

European shares jumped, with banks in the lead, after Abu Dhabi provided $10 billion of finance to debt-laden Dubai to stave off a potential default of securities maturing on Monday.

Asian markets got a positive jolt from news that Dubai received $10 billion in financing from Abu Dhabi, with investors buying stocks and higher-yielding currencies on relief that there would be no default on Dubai bonds maturing Monday.

Broker action

Goldman Sachs upgraded Philip Morris
PM, +0.43%
to conviction buy from buy Monday, saying strong earnings growth is being under-appreciated by the market and that it believes volumes should return to growth by mid-2010, helped by a recovery in emerging markets. Goldman also said there is the potential for continued margin improvement as the company stands to benefit from "a healthy pricing environment" and cost savings. "We believe cigarette pricing continues to have notable headroom for growth in many of Philip Morris' core growth markets as relative cigarette pricing remains low."

Exxon Mobil Corp.
XOM, +0.34%
said Monday it'll buy domestic natural gas giant XTO Energy Inc.
XTO, +0.30%
in an all-stock deal valued at $41 billion. The agreement, which is subject to XTO stockholder approval and regulatory clearance, will "enhance ExxonMobil's position in the development of unconventional natural gas and oil resources," Exxon Mobil said. ExxonMobil has agreed to issue 0.7098 common shares for each common share of XTO. The deal represents a 25% premium to XTO stockholders. The transaction value includes $10 billion of existing XTO debt and is based on the closing share prices of ExxonMobil and XTO on Friday.

Citigroup
C, -0.06%
announced a deal to repay $20 billion of U.S. government aid and also terminate the loss-sharing agreement with the government. Citi will immediately issue $20.5 billion of capital and debt, comprised of: $17 billion of common stock, with an over-allotment option of $2.55 billion; approximately $2.8 billion of prepaid common stock purchase contracts and approximately $0.7 billion of subordinated notes. The U.S. Treasury will sell up to $5 billion of the common stock it holds in a concurrent secondary offering.

On Semiconductor
ONNN
said Monday it plans to buy California Micro Devices
CAMD
for $4.70 a share in cash. The deal values the smaller tech firm at a premium of $1.65 a share, or 54% over its closing price of $3.05 a share on Friday. On Semiconductor said the deal carries an equity value of $103 million. The proposed transaction and related merger agreement have been approved by each company's board of directors.

Cadbury on Monday lifted its sales and margin forecasts as the U.K. chocolate maker stepped up its defense against a 9.9 billion pound ($16 billion) hostile takeover bid from Kraft Foods. Cadbury (CBRY)
CBY, +17.31%
which has already dismissed the Kraft
KFT
approach as "wholly inadequate," warned shareholders not to let the U.S. blue chip "steal" the company as it set out its argument against a deal.

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